If you were born in the 1970s or 1980s, the World Wrestling Federation might have entered your life at some point, at least for a couple of nights per year. Remember when Hulk Hogan body-slammed Andre the Giant at Wrestlemania III? Maybe you were there when Stone Cold Steve Austin drenched The Rock and Mr. McMahon in Coors Light on Monday Night Raw.
No matter how you’ve experienced it, the business now known as WWE has always been real. And it’s also been really profitable.
WWE at a glance
World Wrestling Entertainment has roots all the way back in the 1950s when the grandfather of current CEO Vince McMahon, Jr. ran a small regional circuit called Capitol Wrestling Corporation.
Vince McMahon, Sr. came into the business and began steadily increasing his influence on the National Wrestling Alliance (NWA). The NWA was the largest national wrestling promotion at the time, but McMahon left in protest after a decade to form his own wrestling federation: the WWWF.
The WWWF quickly rose as one of the most popular events in wrestling behind longtime champion Bruno Sammartino. When Vince McMahon, Jr. purchased the company from his father in 1982, he had a new vision. Pro wrestling had always been a regional industry, with different promotions occupying different sections of the country.
Junior wanted a national powerhouse, a promotion that would be known from coast to coast. He hired big-name talents like Hulk Hogan and Roddy Piper and traveled all around the country (at a great financial cost to his own pockets). After the success of Wrestlemania and the rise of stars like Hulk Hogan and The Rock into popular culture, the WWE has become the most profitable wrestling promotion in world history. In 1999, the junior McMahon decided to go public.
History of WWE Stock
WWE (or at the time, WWF) went public on October 19, 1999 with a $172 million valuation and $24 share price.
After opening at $24, the stock leveled off before eventually dropping below $20 in 2002. It would fail to regain that $20 mark for almost 12 years. For over a decade, the price bounced around the mid-to-high teens, failing to gain traction even when earnings were above average.
The year 2017 was different for this stock and one that still remains a catalyst. WWE’s stock price managed to hit the $30 mark a couple years earlier but failed to hold those levels. Another upward trend began in 2017 and this one finally stuck, sending the stock into a new stratosphere.
That $20 share price turned into $40 and then $60. Right now, the stock is hitting all-time highs and showing no signs of slowing down.
Pros and cons of owning WWE stock
Pros of buying WWE stock
1. Record revenue
In Q2 2018, the company posted revenues of $281.6 million, the best number the company has ever done in a quarter. With more focus on women’s wrestling, the company has found a new audience and future outlook is positive.
2. International expansion
WWE recently reached deals with Australian TV programmers and the Saudi General Sports Authority and continues to be a force in the international markets.
3. Increased network subscribers
The WWE has its own premium channel where fans can watch pay-per-view events and original programming. The WWE Network now has a record 1.8 million subscribers.
Cons of owning WWE stock
1. CTE research
Much like the NFL, research on concussions and brain injuries have weighed heavily on both WWE management and the performers. Early death is prominent amongst professional wrestlers.
2. Aging popular wrestlers
Some of the biggest names in wrestling, John Cena, The Rock, Brock Lesnar, Triple H, and The Undertaker are all over the age of 40. WWE depends on its larger-than-life stars to fill arena seats and buy merchandise, so having so many stars in their twilight years poses future risks.
3. No clear successor to McMahon
Seventy-three-year-old Vince McMahon’s wife, son, and daughter all work for the company, but none of them take as high profile a role as Vince. Vince McMahon is an executive, owner and on-stage character all at the same time and replacing him would be incredibly difficult.
How do I buy WWE stock?
Think WWE stock fits in your portfolio? Here's how you can buy it.
- Decide how much you want to invest.
Like any investment, the first step is deciding how much of your portfolio to dedicate to WWE stock. Shares currently trade around $96, so a 100-share investment will cost about $9,600, minus fees and expenses. Remember, putting too much money into one stock can be risky.
- Choose a broker or purchase directly.
WWE stock can be purchased in one of two ways. First, you can find shares at almost all major brokerages. Commissions and fees will differ. If you’re having trouble choosing a broker, please consult Benzinga’s list of the best online brokers.
You can also purchase WWE stock directly from the company using the American Stock Transfer and Trust Company (AST). The AST offers an Investors Choice Plan, which supplies WWE shares to new investors and gives the option to reinvest dividends and capital gains. Last year, the company paid out more than $37 million in cash dividends to investors. - Place your order
Once you’ve decided how much to invest and where to buy WWE shares, it’s time to place your order. You can place a market order to buy the stock immediately at the current market price, or a limit order if you’d like to purchase shares at a specific price only. Note that while market orders will go through immediately during active trading sessions, limit orders are delayed until your specified price is reached
Best Online Brokers
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Final thoughts
WWE’s stock has been shooting to new highs nearly every week this year and with lots of international expansion on the horizon, there’s no sign of it slowing down. The added focus on women’s wrestling has brought in a new fan demographic, too.
However, the company has a long history of scandal and Vince McMahon was nearly removed as CEO during the 1990s steroid trials. The emergence of CTE and brain trauma research also has collision sports under the microscope. Keep these headwinds in consideration when you buy WWE stock.
About Dan Schmidt
Dan Schmidt is a finance writer passionate about helping readers understand how assets and markets work. He has over six years of writing experience, focused on stocks. His work has been published by Vanguard, Capital One, PenFed Credit Union, MarketBeat, and Fora Financial. Dan lives in Bucks County, PA with his wife and enjoys summers at Citizens Bank Park cheering on the Phillies.